Fewer People Are Delaying Retirement as Economy Improves

The improving economy has given older workers cause for optimism: Fewer say they plan to put off retirement.

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Of course, that doesn't mean the hills are alive with the sound of tee-offs and long walks on the beach — a large number are still delaying retirement amid worries about everything from their finances to health insurance.

But it's a glimmer of improvement: Sixty-five percent of workers 60 or older said they plan to put off retirement because they can't afford it, down from 72 percent who said that last year, according to a survey by CareerBuilder.com .

Fitting, too, that the news came on the day that the Dow Jones Industrial Average crossed the 12,000 mark , a level it hasn’t seen since June 2008. Plus, employers are starting to dip their toe in the hiring pool again and consumer confidence is at its highest level in eight months.

“[O]n many levels, this recession has been a psychological recession,” said Johanna Sweaney Salt, a CPA with Kaufman, Schmid, Gray & Salt in Claremont, Calif., and that emotional factor was more pronounced in older Americans, who were closer to the age where they needed that money that was rapidly evaporating.

As her clients watched their retirement accounts go down, down, down, many lost confidence in their ability to retire, Salt said. But now, most of her clients have seen their 401(k)s rebound to pre-recession levels — and then some — which has given them renewed confidence.

“Many people in their 60s who are facing retirement are now saying, ‘Well, gosh, maybe I can do it after all,” Salt said.

Kimberly Foss, a certified financial planner and president of Empyrion Wealth Management in Roseville, Calif., said her clients are also more optimistic.

"Over the past 12 months, more then 50 percent of my 60 + clients have expressed a 'cautiously optimistic' sentiment towards the economy and global markets," Foss said. "This translates into a renewed outlook on executing their pre-2008 retirement plan."

"We have locked in gains to enable those clients who wish to pair down to 'semi-retirement' or those who wish to fully, can now do so with confidence," Foss said.

“It’s encouraging to see more workers have the option to retire if they want to, but there are still some who want to keep working at their companies for a variety of reasons,” said Rosemary Haefner, vice president of human resources at CareerBuilder.

More than two-thirds said they wanted to keep working because they enjoyed their job or where they worked, 26 percent said it was because they feared retirement may be boring and an adorable 14 percent said it was because they just enjoyed feeling needed.

Salt said there’s a running joke among her clients, many of whom are professionals who run their own businesses like doctors, accountants, architects and engineers. “I always hear, ‘I’m going to retire in five years,’” Salt said. “You talk to them two years after that and they say, ‘I’m going to retire in five years. It’s always five years!”

Another factor keeping the self-employed working is worries about succession. They’re just not sure who in the subsequent generations will be able to take over their business.

The return of the stock market — and retirement accounts — has been a boom to consumer confidence but some worries still linger.

"[M]any Americans have dipped into their retirement savings to pay for necessities, or they have stopped contributing altogether," said Mary Liz Burns, a spokeswoman for AARP . "The market has been increasing in value as of late, but most Americans have not made up the retirement account losses that they have faced since the start of the recession."

And, let's face it — the wounds of the financial crisis are still fresh.

“People have seen their plans come up from meltdown levels but they’re concerned they’re not going to see the growth that they did in the past,” Salt said. “The rug was really pulled out from underneath us on a variety of levels and once you’ve been through something like this, it’s like ‘Once bitten, twice shy.’”